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September 30, 1999


The Rediff Business Interview/Masaaki Imai

'Indian companies are unable to translate customer requirements into products'

Masaaki Imai, chairman, Kaizen Institute, Tokyo, Japan If you don't have the money, use your brains, if you don't have the brains...sweat it out," says Masaaki Imai, chairman and founder of the Kaizen Institute, Tokyo, Japan. Called the Father of Kaizen, Imai, 69, propogates his philosophy amongst corporates worldwide: sensible practices at workplace can improve bottomlines more than mindless investments in technology and manpower.

On his second visit to India in six months, Imai recently held an interactive session with a host of CEOs of small, medium and big enterprises, sensitising them to his philosophy.

Imai's book Kaizen -- The Key to Japan's Success was translated into 14 languages. He started his pursuit of Kaizen (in Japanese, it means to change for the better or a common sense, low-cost approach to improvement) many years ago. Today he is the spirit behind the success of numerous Japanese companies like Toyota. Indian corporates like Milton Plastics and Indian Hotels Company (which runs the Taj Group of Hotels) vouch that Kaizen has helped them to cut costs, boost profits and satisfy the customer, all at the same time. Kanchana Suggu spoke to Imai during his visit to Bombay.

Could you give a brief history of Kaizen?

In Japan, Kaizen is almost a 50-year-old concept. Toyota was amongst the very first companies to implement it. But today almost every other Japanese company is following Kaizen.

Email this interview to a friend Is Kaizen limited only to the manufacturing industry?

Not at all. This is a misconception. Kaizen is equally applicable in the service industry, retail industry and even on the golf course. It has relevance in one's personal life too, you know. There is simply no end to it.

Please elaborate.

'Go to Gemba' is the motto we all follow. Gemba in Japanese means the place where all activities are actually taking place; in other words, the place where value is added. In case of the manufacturing industry, gemba is the shop-floor; for the hotel industry, it is the place where the food is actually being cooked; and in case of the service industry; it is everywhere. Gemba is thus the most precious place for the management.

How popular is Kaizen in Japan?

If you take a look at the hierarchy triangle of most Japanese companies, you will notice that gemba is placed at the top-most level, followed by the middle level managers and then there is the CEO of the company.

The best example I can state is that of Toyota. Today, when the automotive industry is not doing so well, Toyota is the only company to actually make profits. And I can tell you that Kaizen has played a major hand in its progress. Mr Ohno of Toyota is such a strong believer in Kaizen that people call him Mr Oh No! (laughs).

What is the first step that one has to take towards Kaizen?

I think Kaizen should be in your thought, word and deed. What needs to be understood is that Kaizen cannot be practised at the manager's desk. The first step that one has to take is to go and get things done.

Managers can begin with starting to clean their own equipment. You cannot know anything unless you get involved in the actual work at the lowest level. You would be amazed by the number of discoveries made once you are involved in the actual work. So many details that were hitherto ignored will suddenly become very important. In my view, the best time to start practising Kaizen is when you are faced with a crisis.

Could you elaborate with some examples?

Kaizen basically looks at small details: workers should not leave the workplace too often; everything that they need should be within their arm's reach and so on. Let me project a scenario: if there is a minor electrical problem, everyone waits for the electrician to arrive. But a minor problem can be tackled by anyone. Instead work comes to an absolute standstill. There are these minute details that make the whole difference.

What are your observations of managers?

One thing that most managers don't seem to be doing is observe. That's because they are not actually present in the workplace.

There is this one incident I would like to mention here. A German manager wanted to buy some six machines, each costing 15 million Deutsche Mark. He invited our manager for advice. Our manager asked him: 'What percentage of time in a day do these machines work?' The answer he got was: ' I don't know.'

The German was about to spend as much as 15 million DM and he didn't know how much time these machines were actually going to be used. It was found out that the machines would be used for only 38 per cent of the time. The machines he was about to purchase were not essential at all!

Observations like these can only be made by regularly spending some time at the shop-floor. Managers only try to find short-cuts by hiring foreign consultants and paying them exorbitant amounts as consultancy fees. That's where the real problem lies.

So practising Kaizen does not cost a lot of money; on the contrary, one can save a lot of money. Then why hasn't Kaizen gained worldwide acceptance?

Kaizen is a top-down approach. It requires a lot of effort; especially by executives at the top-most level. Unless they are willing to take the first step, nothing can be done.

What is your view about the management practices in the Indian corporate sector?

I see that Indian managers are extremely intelligent. They are abreast with all latest technologies and developments. But the problem is that they are not practical. They completely isolate themselves from reality. They are under the impression that real knowledge can be gained only by reading books and attending lectures. How often do they actually roll up their sleeves and get into some action? They really need to make more effort (at getting into the thick of action). They have immense knowledge, but what you really need is wisdom and that only comes by doing things yourself.

So Kaizen is basically action-oriented?

Yes, it is. I firmly believe that 90 per cent of the problems can be solved using common sense. Rule number one is: Go to gemba and take a real good look. Then take action right away. If you see anything that needs to be changed, do it at once. The most important thing is to detect the non-value adding activities (Muda as we call it in Japanese) and eliminate them as soon as possible.

Do you foresee Indian companies adopting Kaizen in a big way?

The problem with most Indian companies is that they do not give enough importance to the consumer. They are unable to translate customer requirements into products.

Even if they do, they do not have a good system to support it. There is an acute need to address this issue in India. But I'm sure this too shall change.

Companies like Milton Plastics, Jollyboard (maker of hard and softboards), and very recently, the Taj Group of Hotels, have successfully implemented Kaizen.

Jollyboard has been able to reduce its workforce by half, increase its production by 40 per cent and revenues by 20 per cent after they have started practising Kaizen.

I also see a host of new companies, large and small, showing great enthusiasm and eagerness to know how they too can practise Kaizen. If this continues, India will not stay far behind.


Resume of Masaaki Imai
'Kaizen can help Indian companies to increase profits'

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